Delaware ruling supports enforceability of forfeiture-for-competition provisions
JD Supra: Mergers
DECEMBER 26, 2024
On December 18, 2024, the Delaware Supreme Court (the Court) held in LKQ Corp. v. Rutledge that forfeiture-for-competition provisions in employee equity award agreements are enforceable in certain contexts. This article summarizes the Courts ruling and what it means for employers looking to implement forfeiture or clawback provisions as a means of enforcing restrictive covenants in equity compensation arrangements under Delaware law.
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